Note O - Palladium Contingent Purchase Price

12 Months Ended

Dec. 31, 2012

Contingent Purchase Price Disclosure [Text Block]

NOTE O – PALLADIUM CONTINGENT PURCHASE PRICE

On May 16, 2008, the Company entered into a Share Purchase and Shareholders’ Rights Agreement (the “Agreement”) by and among an individual, Palladium and the Company providing for the purchase of a 57% equity interest in Palladium from its shareholders for a total purchase price of €5,350,000, or $8,448,000 (including a loan of €3,650,000, or $5,764,000).  On June 2, 2009, the Company entered into Amendment No. 1 to the Agreement providing for the Company to purchase the remaining 43% equity interest in Palladium for €5,000,000 plus a variable future price.  On May 1, 2010, the Company entered into Amendment No. 2 to the Agreement revising the terms of the remaining future purchase price for Palladium to be equal to €3,000,000 plus up to €500,000 based on an amount calculated in accordance with a formula driven by Palladium’s EBITDA for the twelve months ended December 2012.  In July 2012, the Company entered into Amendment No. 3 to the Agreement, in which the Company made a payment of €1,443,000, or $1,776,000, and revised the terms of the remaining future purchase price to be equal to the net present value of €1,500,000 plus up to €500,000 based on an amount calculated in accordance with a formula driven by Palladium’s EBITDA for the twelve months ended December 31, 2012.  At December 31, 2012, the CPP calculated in accordance with this formula was €2,000,000, or $2,644,000, and is payable in 2013.

The CPP was determined each quarter based on the current quarter’s projection of Palladium’s EBITDA for the twelve months ended December 31 of the current year.  Excluding the initial recognition of the CPP, any change in CPP was based on the change in net present value of the remaining minimum guaranteed payment and the current quarter’s EBITDA projection, and was recognized as interest income or interest expense during the applicable quarter.  During the second quarter of 2010, the Company recognized the initial fair value of the CPP of $3,320,000, which was recorded in Other Income/(Expense), net on its Consolidated Statement of Earnings/Loss.

The change in the CPP for the years ended December 31 was as follows (in thousands):

	2012			2011		2010
Beginning balance	$	3,739		$	3,689	$	0
Initial recognition of the net present value of the CPP		0			0		3,320
Payment		(1,776	)		0		0
Change in net present value of the CPP		681			50		369
Ending balance	$	2,644		$	3,739	$	3,689